The cyclical pattern of capitalism is periodically punctuated by severe crises that lead to restructuring of the political-economic system. In this article we argue that the underlying factor of the current crisis is a real economic imbalance caused by an unprecedented growth of the nancial sector. Moreover, we argue that a return to an expansive era of capital accumulation will become impossible in the advanced countries.

Each structural crisis opens opportunities for signicantly advancing the position of the working-class. But it requires a socialist movement with the organisational and programmatic capacity to articulate and implement progressive policies. This is not the state of the movement at present. We believe that without a political economy of the working-class it is impossible to formulate a coherent political program of the working-class.

2. Insights from political economy

2.1. Value and money. Classical political economy held social labour as the basis of economic value. Labour is a universal but scarce resource. When goods and services are produced as commodities their market prices are correlated with the quantity of social labour necessary to reproduce them. [8, 19, 3] When a commodity is sold, a relation of debt and credit is formed between buyer and seller. Money is a means to account credit and debt, and is derived from the state’s ability to enforce a tax debt on its subjects. What it deems universally acceptable as means of settling tax obligations becomes a universal equivalent that can be used in exchange. Thus when a buyer exchanges a money token for a commodity, the seller accepts the token as a means of settling its debts elsewhere.

Money is therefore not wealth but represents a claim on wealth, derived from the legal system and the state. It gives the power to command labour, either the labour-content of commodities or as the labour-power of others. [13]

2.2. Protability and the steady-state rate. The basic unit of production in a capitalist economy is the rm, which is driven by the prot imperative. The decisions each rm take locally have macroeconomic consequences, therefore profitability, i.e. the rate of return on the capital invested, is a crucial variable in the development of capitalist economies.